Term Paper: Management and Operational Issues

Pages: 7 (2427 words)  ·  Bibliography Sources: 15  ·  Level: College Senior  ·  Topic: Business  ·  Buy This Paper

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[. . .] However, there are many other factors that have to be considered along with the age such as: if and how many management courses has the person done before, if he/she has any management experience before and if the business failed or not while that person was managing it, etc. (Hall, 1995).

Outside Assistance

Experts and consultant can be hired in order to provide guidance for managing the business in a proper manner. Researches' have shown that hired experts can actually enable the owners and managers in dealing with the businesses in a much better manner (Hall, 1995).

Marketing

Marketing is of utmost importance for the success of any business in today's business world. This is the step through which the customer is linked to the products and the services that are provided by a business. According to Hall (1995), the chances of a firm surviving the crucial beginning period of its creation increase a lot if they don't face a lot of uncertainty regarding the demand for their products. It has also been mentioned by Hall (1995) that the means through which a business is obtained are extremely important for the success or failure of a firm.

Financial Management

Finance and its management in the proper manner are considered to be of great importance for the success of the business. According to Hall (1995) it is important for the business owners to keep detailed information of the business, it should be kept separate from the personnel accounts. This information also needs to be categorized according to the places that it has been derived from, for example, if it was gathered from the cashbooks, double entry bookkeeping, bank statements, if it was computerized or not etc.

Hall (1995) also believes that the information which is gathered in a more regular manner is a lot more helpful and useful for the business. The information should be kept up-to-date. According to Hall (1995) the chances of those businesses surviving whose owners gather the information mainly to run the business in a more efficient manner are a lot more. Hall (1995) further emphasized on the importance of the financial information by saying that the person who is responsible for collecting this information is also of great importance. Therefore, only an expert such as an accountant should be assigned the task of gathering information. It should also be made ensured that the financial information being gathered is of quality Hall, 1995).

Strategy

Building a strategy is a step that all the firms take in order to ensure that they succeed in this competitive business environment. The decisions regarding the location, operating hours, product lines etc. are all known as strategic decisions. It is very important for the owner to be able to let his/her employees know what their long-term plans are so that the employees can understand exactly what is required off them (Hunger and Wheelen, 2003).

Strategy is step that can literally make or break a business. If a person has understood the importance of strategy he/she has understood the business being conducted. For the small firms the importance of strategy is very high as these firms don't have a lot of resources to risk like the large firms. Therefore they need to know what needs to be done and why it needs to be done. According to Hall (1995) most of the small firms don't make formal strategies and some of the firms that do make them do so only because they want to make sure that at least something is being done (Hall, 1995).

Conclusion

Factors from the environments that have been mentioned above are mainly responsible for the failure of the Small Medium Enterprises or posing the most difficult challenges to them during the first two years of their starting up. It can be concluded from the chapter that the absence of managerial skills is one of the major reasons for the business failures. The SMEs failures and their meaning in terms of the functional areas of the management have also been discussed. There are other factors too such as: age and size, marketing, government regulations and outside assistance which also play a role in the success or failure of the businesses.

References

BURNS, P. 2001. Entrepreneurship and Small Business. New York: Palgrave.

HALL, G. 1995. Surviving and Prospering in the small firm sector. London: Routledge.

HUNGER, J.D. And WHEELEN, T.L. 2003. Essentials of Strategic Management, 3rd edition. New Jersey: Prentice Hall.

LEBRASSEUR, R., ZANIBBI, L. And ZINGER, T.J. 2003. 'Growth Momentum in the Early Stages of Small Business Start-ups', International Small Business Journal, 21(3): 315-330.

LONGENECKER, J.G., MOORE, C.W. And PETTY, J.W. 2003. Small Business Management: An Entrepreneurial Emphasis, 12th edition. Ohio: South-Western.

MEGGINSON, L.C., BYRD, M.J. And MEGGINSON, W.L. 2003. Small Business Management: An Entrepreneur's Guidebook, 4th edition. New York: McGraw-Hill.

MOUTRAY, C. (2008). Looking Ahead: Opportunities and Challenges for Entrepreneurship and Small Business Owners. A working paper for Office of Advocacy. Accessed March 12, 2012 from http://archive.sba.gov/advo/research/rs332tot.pdf

RWIGEMA, H. And VENTER, R. 2004. Advanced Entrepreneurship. Cape Town: Oxford University Press.

SHA, S. (2010). An Investigation Into Problems Facing Small-To-Medium Sized Enterprises In Achieving Growth In The Eastern Cape: Enhancing The Strategy For Developing Small 'Growth Potential' Firms In The Eastern Cape. A thesis submitted in fulfillment of the requirements for the degree of Master of Commerce (Management): Department of Management: Rhodes University. Accessed March 12, 2012 from http://eprints.ru.ac.za/288/

SONI, S. (2005). The Challenges Facing Small Businesses: A Global Perspective. The Dorrian Consulting Group. Accessed March 12, 2012 from… [END OF PREVIEW]

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